Sierra Leone’s Central Bank has informed the public that it has raised its benchmark lending rate to 18.75 per cent after reviewing recent macroeconomic and financial developments in the global and domestic environments.

According to the Acting Governor, Ibrahim L. Stevens, after the Monetary Policy Committee (MPC) meeting on 30th March 2023; they decided to increase the Monetary Policy Rate (MPR) by 0.50 basis points (bps), adjusting the Standard Lending Facility Rate (SLFR) and the Standard Deposit Facility Rate (SDFR) upward by the same margin effective Monday 3 April 2023.

The interest rate applicable on reverse repurchase transactions of the Central Bank with Commercial banks on an overnight basis under the Standing Facility; provides the ceiling rate for the injection of overnight liquidity to the banking system by the Bank of Sierra Leone.

However, the SLFR is the ceiling rate (maximum rate) for the injection of overnight liquidity into the banking system by the Central Bank. Amid the uncertainties faced by Sierra Leoneans as inflation remained a significant problem, the MPR is an interest rate that the monetary authority sets in the evolution of the main monetary variables in the economy.

The MPC noted that inflation continues to squeeze household real incomes, reducing the welfare of households and posing a threat to macroeconomic stability.

This compelled the Committee to adjust the rates upward due to the continued upward risk to prices and the impact of exchange rate depreciation.

According to Statistics Sierra Leone, in February 2023 inflation rate showed an increase of 5.06 per cent cents as compared to the December 2022 headline inflation rate of 37.1 cents.